CODIFICATION OF MINING LAWS 


STATEMENT OF 
MR. HORACE V. WINCHELL 

BEFORE THE 

COMMITTEE ON MINES AND MINING 
UNITED STATES SENATE 

♦i 

SIXTY-THIRD CONGRESS 

SECOND SESSION 

ON 



A BILL TO PROVIDE FOR A COMMISSION .TO CODIFY 
AND SUGGEST AMENDMENTS TO THE 
GENERAL MINING LAWS 


FEBRUARY 24, 1914 


Printed for the use of the Senate Committee on Mines and Mining 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 













V 



COMMITTEE ON MINES AND MINING. 

United States Senate. 

THOMAS J. WALSH, Montana, Chairman. 

HENRY F. ASHURST, Arizona. MILES POINDEXTER, Washington. 

BENJAMIN R. TILLMAN, South Carolina. ALBERT B. FALL, New Mexico. 

KEY PITTMAN, Nevada. THOMAS STERLING, South Dakota 

JOHN F. SHAFROTH, Colorado. 

Miles Tavloh, Cleric. 

2 


D. OF D. 

APS 2 1914 








CODIFICATION OF GENERAL MINING LAWS. 



FEBRUARY 24, 1914. 

Committee on Mines and Mining, 

United States Senate, 

W ashing ton, D. C. 

The committee met at 10.30 a. m., pursuant to the call of the chair¬ 
man. 

Present: Senators Walsh (chairman), Shafroth,Ashurst,Sterling, 
and Poindexter. 

STATEMENT OF MR. HORACE V. WINCHELL, GEOLOGIST AND 
MINING ENGINEER. 

The Chairman. State your name, Mr. Winchell. 

Mr. Winchell. Horace Y. Winchell. 

The Chairman. You live where? 

Mr. Winchell. In Minneapolis^ Minn. 

The Chairman. Your business is what? 

Mr. Winchell. Geologist and mining engineer. 

The Chairman. How long have you been practicing that pro¬ 
fession ? 

Mr. Winchell. About 25 years. 

The Chairman. Where? 

Mr. AYinchell. Throughout the entire country—Alaska, Mexico, 
South America, and portions of Europe. 

The Chairman. In this country? 

Mr. Winchell. All over North America. 

The Chairman. You desire to say something with reference to one 
of the bills before the committee, do you ? 

Mr. AYinchell. Yes, sir. 

The Chairman. AYhich one, Mr. AYinchell? 

Mr. Winchell. The bill which provides for the appointment of a 
commission. 

The Chairman. We shall be very glad to hear you in regard to 
Senate bill 4373, which is as follows: 

A BILL To provide for a commission to codify and suggest amendments to the general 

mining laws. 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress'assembled, That the President shall appoint a 
commission of three members, one of whom shall have had practical experience 
in the operation of mines, one a lawyer of experience in the practice of mining 
law, and the third a member of the United States Geological Survey. 

Sec. 2. That it shall be the duty of the commission so appointed to prepare 
for the information and use of the President and Congress a tentative code of laws 

38573—14 a 



4 


CODIFICATION OF GENERAL MINING LAWS. 


providing for tlie location, development, and disposition of mineral lands and 
mining rights in the lands of the United States, including the Territory of 
Alaska, as in the opinion of the commission are best adapted to existing condi¬ 
tions and will correct defects or supply deficiencies in existing general mining 
laws: Provided, That said code shall not deal with lands containing deposits 
of coal, oil, gas, phosphates, or soluble potassium salts. 

Sec. 3. That the commission shall hold public hearings in the principal mining 
centers in the western United States and Alaska; invite and receive suggestions 
and opinions bearing upon or relating to existing mining laws or desirable 
amendment thereof; and may also consider the laws and experience of other 
countries with respect to disposition and development of mines and minerals. 

Sec. 4. That on or before the first day of January, nineteen hundred and 
fifteen, the commission shall submit to the President full report as to its opera¬ 
tions, conclusions, and recommendations, including in or transmitting with said 
report a fully drafted tentative code of mineral laws, as provided in section two 
hereof, and within thirty days from receipt thereof the President shall transmit 
the same to Congress with his recommendations. 

Sec. 5. That each of said commissioners, not in the Federal service, shall re¬ 
ceive a salary of $500 per month, and for the payment thereof and of the actual 
and necessary expenses of the commission, including traveling expenses, the 
sum of $25,000, or so much thereof as may be necessary, is hereby appropriated 
out of any money in the Treasury not otherwise appropriated. 

Mr. Winchell. No. 4373, a bill to provide for a commission to 
codify and suggest amendments to the general mining laws. There 
are three organizations of mining men who have taken an active 
interest in the question of the revision of the mining laws—the Min¬ 
ing and Metallurgical Society of America, the American Institute of 
Mining Engineers, and the American Mining Congress. These three 
organizations I represent. I am the chairman of the mining law 
committee of the first two mentioned and a member of the mining 
law committee of the third. It is believed that a few words upon the 
importance of the mining law revision and of the mining industry 
should be spoken on behalf of these mining men. 

One of these societies—the American Institute of Mining En¬ 
gineers—has a membership of more than 4,500 and they represent 
men engaged in all branches of mining. The importance of the 
mining industry is not always appreciated. The value of the raw 
materials annually taken out of the mines of this country is about 
$2,250,000,000. 

Senator Poindexter. Does that include coal mines? 

Mr. Winchell. Yes, sir; and directly engaged in the operation of 
mining more than 1,000,000 men are employed. In the prepara¬ 
tion of the crude products, immediately following that of removal 
from the earth, 2,300,000 men are employed, and the value of the 
products up to the point of the manufacture of the material in the 
form in which it is fit for use in the arts is $4,000,000,000. 

Senator Shafrotil. That is the grant total, is it, of everything? 

Mr. Winchell. Yes, sir. In other words, the miner and the chem¬ 
ist and the metallurgist contribute each $2,000 per annum to the 
wealth of this country. Comparing that with the agricultural in¬ 
dustry, in which 12,000,000 men are employed and the products of 
which are valued at $9,500,000,000, you will see that the average out¬ 
put of the labor employed in agriculture is $800 per annum. The 
mining industry feels that it has not always received as careful at¬ 
tention at the hands of the legislators as the agricultural industry. 
The total Federal appropriations for agriculture, including agri¬ 
cultural education, per capita—that is, appropriations for each citi¬ 
zen of the United States—amount to 32 cents per annum. Similar 


CODIFICATION OF GENERAL MINING LAWS. 


5 


appropriations to benefit mining, geological surveys, etc., amount to 
1 cent per capita per annum. So our mining products amount, in 
their rawest material condition, to one-fourth of the value of the 
agricultural products, but the appropriations for agriculture aio 
thirty-two times as much as to encourage mining. 

Now, I should like to call attention to the fact that the agricultural 
industry is a prominent one. Properly looked-after lands will pro¬ 
duce crops forever. Seasons occur in succession; rains fall, crops 
grow; water powers are everlasting. Even forests may be renewed 
and rejuvenated and resusciated, but a mine is a definite amount of 
substance, and when it is exhausted it never grows again. The only 
way to perpetuate the mining industry is to encourage the discovery 
of new mines. Let us compare, for a moment, the production of the 
United States with that of the entire world in important minerals: 
Of aluminum the United States produces 40 per cent of the total 
world’s output; of borax we produce 44 per cent; coal, 38.5 per cent; 
gold, 19.3 per cent; gypsum, 44.4 per cent; lead, 34 per cent; petro¬ 
leum, 63 per cent; phosphate, 51 per cent; pig iron, 38 per cent; 
quicksilver, 18 per cent; salt, 20.4 per cent; silver, 25.6 per cent; sul¬ 
phur, 59.6 per cent, and zinc, 32.3 per cent. A country occupying 
6 per cent of the land area of the globe, with a little over 6 per cent 
of the total world’s population, produces nearly 36 per cent of the 
total mineral production of the world. . Now, that may be a matter 
for national pride and congratulation. 

Senator Shafroth. What were you reading from ? 

Mr. Winchell. I am quoting from an article of my own appear¬ 
ing in the Engineering Magazine for February, 1914, and the sta¬ 
tistics are taken from a statement of the production of the mineral 
resources. I shall be glad to leave it here for you. 

Senator Shafroth. I wish you would. I would like to read it. 

Mr. Winchell. This matter may be, as I say, a cause of national 
pride, but it suggests that we are exhausting our exhaustible mineral 
wealth and other countries are preserving theirs. It suggests the 
question “What will happen when it is impossible to make such a 
production? How much will our industries suffer; how many of 
our men will be idle; what is the effect of exhausted mining camps? ” 
Look at Colorado: In 1900 there were 40,111 men employed in the 
metal-mining industry; in 1910, 19,568—a falling off of 50 per cent; 
or, if you prefer to compare by decades, the lustrum from 1903 to 
1907 showed an average of 33,955 men employed in metal mining 
in Colorado. The period immediately succeeding—the five years 
from 1908 to 1912—showed there were 25,481 men employed, a de¬ 
crease within five }^ears of 25 per cent, a falling off of one-fourth. 
What will happen to the mines unless new mines are found to re¬ 
place them? 

Senator Sterling. You attribute the falling off to the failure to 
discover new mines? 

Mr. Winchell. Yes, sir; that is the primary cause. You must 
find new mines to replace old ones. The prospector must be encour¬ 
aged and not discouraged; but the direct falling off is due to the 
exhaustion of mines which are unable to keep up the production 
that they once made. 


6 


CODIFICATION OF GENERAL MINING LAWS. 


Senator Shafroth. I am glad you gave those figures, because I 
have been trying to find them for some time, but never could get 
them. 

Mr. Winchell. Now, the importance of good mining laws is not 
always fully realized. I may point to one or two instances where I 
believe bad mining laws are chiefly responsible for the lack of min¬ 
eral production. The Argentina Republic, which I visited last 
summer, where I spent some months, has an area of about one-third 
that of the United States. It has a varied climate, topography, and 
geology. It extends from the summit of the Andes on the West to 
the Atlantic Ocean on the East. It has a common boundary of 3,000 
miles in length with Chile—Chile on the western slope of the Andes, 
Argentina on the eastern slope. Chile produces hundreds of mil¬ 
lions of dollars of mineral every year, deriving an income of between 
sixty and seventy million dollars per annum from nitrate deposits 
alone; and Argentina, with twice the population and very much 
greater area, produces the nominal amount of less than $300,000 
per year of all kinds of mineral. 

Now, they appointed a commission 30 years ago to draw up a set of 
mining laws. This commission was composed of eminent lawyers, 
statesmen, citizens, none of whom knew anything about mining;, 
because they did not have any men, or very few men, there who did 
know anything about mining, but they published a book of that 
size, nearly an inch in thickness, containing the mining code of the 
Argentine Republic, and the provisions of that code are such that it 
is a practical impossibility for a prospector or a miner to engage in 
mining operations in Argentina to-day. I need not particularize, 
but that is my conclusion, after a careful investigation of the situa¬ 
tion, that until their mining laws are materially modified mining 
will never be indulged in on a large scale in Argentina. 

Senator Poindexter. What is the essential defect in their code ? 

Mr. Winchell. In the first place, no sufficiently secure possessory 
title is granted to the prospector while he is searching for ore. In 
the next place, there is a method of supervision attempted to be re¬ 
tained in all cases by the Government, which applies to essential 
particulars and details of the mining operations so as to make it im¬ 
possible for a man to conduct his mine without constant interference 
on the part of somebody connected with the Government and who 
knows nothing about the matter. In the next place, while it is pro¬ 
vided at the outset that the mineral resources are open to the world, 
to locate and develop, they proceed, then, to hamper that permit by 
saying if you locate your mine upon a piece of agricultural land, 
you may be compelled to buy that entire ranch at the end of two 
years. They provide restrictions regarding corporate ownership 
control, such as if three of us organize a mining company and issue 
stock, no one of us three can ever sell to any other person than one of 
the three his stock with a voting right. He can sell the stock with 
a right to carry dividends, but he can not sell any voting right; and 
whenever by such proceedings an individual becomes the owner of 
50 per cent or more, then every question of corporate management 
is a tie and must be referred to the authorities at Buenos Aires. 
Obviously no mining stock is bought under those conditions. 

Senator Shafroth. How do they acquire title? Do they ever get 
title ? 


CODIFICATION OF GENERAL MINING LAWS. 


7 


Mr. Winchell. No, sir; they never get title to the mineral. It is 
provided that so long as you work your mines you must complete 
your explorations within 15 months. It took friends of mine four 
years in Chili, just over the boundary line, to complete their explora¬ 
tion work. They could not do that in Argentina. You must operate 
constantly. There is no provision made for paying a ground rent 
of the assumption of taxes in lieu of operation. Consequently, if I 
find a mine situated so far from a railroad that I can not operate it, 
or so far from a reduction plant that the ore can not be treated, or 
for which there is no other known method of tratment, and I want 
to spend the next two years in development in order to facilitate 
operation, notwithstanding that, I must keep on employing so many 
men at so much per hectar or less. 

Senator Poindexter. Your conclusion is, then, that the less of 
restriction on the part of the Government and the more freedom on 
the part of the miners, those who locate, the better for the mining 
interests ? 

Mr. Winchell. I think so, up to a certain point. I do not say 
that I do not believe in a proper amount of supervision, but I do 
say that it is improper to grant to minor officials the right to inter¬ 
fere on any and every pretex with the work of the miner. I might 
mention China, which is not a very intellectual country, as we all 
know, which has a mining law and the code of 1907, drawn up two 
years prior thereto, and which was promulgated by their best sages. 
It provides that no excavations shall be made in the earth within, say, 
2,000 feet of a grave of member of the royal family, and so on down 
to within 500 feet of the grave of a mandarin, and moreover that no 
shaft shall be dug deeper than 500 feet anywhere for fear of letting 
out the devils. That is the mining code of 1907 of China. I do 
not suppose that was made by mining men at all. 

The Chairman. Before you pass that, Mr. Winchell, will you tell 
the committee of the work you have done in the study of the mining 
codes of the various nations of the earth ? 

Mr. Winchell. Yes, sir; I will tell them very briefty. In connec¬ 
tion with the committees of which I am chairman, for several years we 
have been engaged in a study of the mining laws of different countries 
in connection with the operating conditions of those countries. I 
have sent thousands of letters to members of the mining fraternity, 
if you may call them such, asking them for expressions of their opin¬ 
ion regarding certain points of mining law as exemplified and illus¬ 
trated in their connections with mining in different countries. We 
have assembled the copies of the mining codes and discussions of the 
mining laws of every country which is available. We have made 
comparative studies and we are impressed with the idea that some 
of the underlying fundamental principles of mining law are not 
expressed in our code to-day. Our mining law was passed 41 years 
ago—more than 41 years ago—and however applicable it may have 
been to the conditions at that time, it is not applicable to the condi¬ 
tions as they are found to-day. Last week in New York City at the 
annual meeting of the American Institute of Mining Engineers that 
matter was discussed at some length. We had the pleasure of the 
attendance of your chairman at that meeting, and in connection 
with it a few papers were presented by mining engineers. I have 


8 


CODIFICATION OF GENERAL MINING LAWS. 


copies of those papers here and I shall be glad to furnish each one 
of you with a copy, so that you may learn from the point of the min¬ 
ing engineer why the mining laws should be revised, and some of 
the reasons why conditions are different to-day than they were 
tvhen the present law was passed. I will not take time to dwell upon 
those questions now, but I may say this in concluding: The mining 
engineers are in favor of a general revision of the present mining 
law. They do not believe that revision can be made piecemeal, 
because the different questions so interpenetrate each other that it is 
essential that the matter should be made harmonious and concrete 
and be worked out by careful study. They have, therefore, for some 
time recommended just such action as is contemplated in this bill— 
the appointment of a commission to visit all parts of the country 
and Alaska and ascertain by immediate and direct inquiry what 
modification of the present law should be made to best adapt the 
mining law to the encouragement and development of mines and 
mining. This commission, we believe, should have on its member¬ 
ship representatives of the mining industry. We believe that the 
miners, the men who have all of their lives been directly in touch 
with this matter, have ideas which should be incorporated in any 
revision, and that they are better able to elicit the opinions of min¬ 
ing men than a commission which did not include members of that 
profession, and that possibly the prospector should be represented. 
The mining engineer should be represented; the man who is directly 
and constantly engaged in mining ought to have something to say 
about the laws which will best enable him to carry on his business, 
as well as the representatives of the United States Government. 
Therefore we present most respectfully to this committee our claim 
to a representation upon any commission which may be appointed 
to consider this whole matter, and our hearty approval of the project 
outlined in this bill. 

The Chairman. Is it your opinion, Mr. Winchell, that some lawyer 
skilled in the practice of mining law ought to be designated as a 
member of the commission? 

Mr. Winchell. Yes, sir; I certainly think so. 

The Chairman. I want to ask you another question. This bill con¬ 
templated that the commission should not deal with deposits of coal, 
oil, gas, phosphates, or soluble potassium salts. What is your view as 
to the wisdom of excluding that part of the bill in relation to mineral 
deposits from the work of the commission? 

Mr. Winchell. Inasmuch as there is very little fundamental dif¬ 
ference in principle, although there are particular differences in the 
method of treatment between coal, phosphates, salines, and metals, I 
do not believe that the scope of this commission should be limited to 
metal mining. I think it should be requested to investigate the con¬ 
ditions and prepare a report and present the draft of a bill which 
shall cover the entire situation of mining in all of its phases. 

The Chairman. Is it your view, Mr. Winchell, that a revision and 
codification of the laws in relation to these matters is needed as well— 
that is, the disposition of coal, oil, gas, and so on? 

Mr. Winchell. There are some revisions most urgently needed in 
connection with coal, oil, and gas, but under the present system of 
withdrawals and of permission to purchase, such as coal lands—that 


CODIFICATION OF GENERAL MINING LAWS. 


9 


is not, it seems to me, going to run away. The situation is not one 
which requires attention within the next six months, and it might 
well await the general report of such a commission on the whole 
subject. 

The Chairman. Is that all, Mr. Winchell ? 

Mr. Winchell. I believe that is all I have to say on the subject at 
this time. 

(Thereupon the committee adjourned.) 


o 



► 






